After Tanking In New York, Aussie Chain Pie Face Is Now In Administration

The Pie Face in New York's
theater district was popular ... in 2012.AP Photo/Richard Drew.

Australian franchise Pie Face is in voluntary administration,
just weeks after the company suddenly closed a number of outlets
in the US.

Franchisees received notification on Nov. 21 that the company had
appointed Jirsch Sutherland to advise the business as it sought
to restructure and refinance.

The company was founded in 2003 by former Wall Street banker
Wayne Homschek and by 2012 was valued at nearly $60 million amid
talk of an IPO. Homschek talked of 500 stores across Australia.
At its peak, the company had nearly 80 franchises across
Australia as well as more than a dozen company-owned stores, but
over the last few years, a number have closed and a disgruntled
Brisbane franchisee launched an $800,000 legal action against Pie
Face claiming they were misled over profit projections, which
Homschek denied.

But last year the Australian Financial Review obtained leaked documents which showed
Pie Face was posting losses on nearly all its company-owned
stores in the first quarter of 2012, including $20,000 a month on
its George Street outlet in central Sydney, and wanted to sell
loss-making stores.

At the time a company spokesperson dismissed it as “incomplete,
inaccurate and out of date” information.

On Nov. 24, Homschek told Fairfax Media that parts of the
company were still profitable and he was still looking at an IPO
in 2015.

He blamed the cost of leases on three factories after
consolidating production to a single site in Sydney’s west for
the problems, while a spokesperson for the administrators said
the company-owned stores needed restructuring and that Pie Face’s
US partner had caused problems.

Pie Face said it was “business as usual” during the review and
that the international operations were unaffected.

“The move comes as part of a wider company review, which will see
the company focus on supporting the growth of its
franchise-operated stores as well as the wholesale business,” Pie
Face said in a statement.

Last month the company suddenly closed six of its seven New York
outlets, three years after they first opened, despite Homschek
announcing plans for 150 stores worldwide by 2015.